Wholesale or Buy and hold?

[Shon Drennan]

I am currently about to buy a single family home from a family friend for $100,000. It will need roughly $10,000 of repair. The appraisal value is approximately $190,000. My question is should I buy and hold this property which will tie up money for future investments or should I whole sale to fund the next rehab project to continue to expand?

[Ray Johnson]

@Shon Drennan We need more information to help with advice. If you Buy-and-Hold, How much is the rent for the property? Like @Greg Dickerson mentioned selling it retail may be an option for you.

How will you be purchasing the property, Cash, Loan with 20% down, Move-in while rehabbing using 3.5% Owner Occupant Loan?

Below is just a basic workout to give you an idea as to what to look for when making a decision. To make it simple I did this as a Cash purchase, the profit numbers get smaller if you have a loan in place as a part of this equation. These are mock numbers for rent since I have no idea what the rent is in your area. Other options are you can do a cash out refi, or a HELOC to get your cash out if the ARV is at $190,000

Update us and let us know what the numbers really look like beyond the purchase price and rehab cost.

190,000	Sales Proceeds
(11,400)	6% REA Commission
(100,000)	Purchase cost
(3,800)	Purchase settlement cost
(10,000)	Rehab Cost
(5,700)	Sellers Closing cost @ 3%
59,100	Profit
(23,640)	Taxes on profit
35,460	Net profit
800	Gross Rent
(400)	All Expenses
(80)	Reserves
320	Net Cash Flow
111	Number of months to make $35,460
9.23	Years